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SBI Mutual Fund has launched of SBI ETF Quality, its first smart beta offering, an open-ended scheme tracking Nifty 200 Quality 30 index. The NFO opens for subscription on November 26 and closes on December 3. No entry load and exit load will be applicable for the scheme. The minimum subscription amount is ₹5,000 and in multiples of ₹1 thereafter.

Here is an in-depth information on the ETF:

NIFTY200 Quality 30 Index includes top 30 companies from its parent NIFTY 200 index, selected based on their ‘quality’ scores. The quality score for each company is determined based on return on equity (ROE), financial leverage (Debt/Equity Ratio) and earning (EPS) growth variability analysed during the previous 5 years

Highlights:Stocks from NIFTY 200 index at the time of review are eligible for inclusion in the index. 30 companies with higher profitability, lower leverage and more stable earnings are selected to be part of the index. The weight of each stock in the index is based on the combinatio…

Is India moving towards index mutual funds? Many mutual fund advisors believe so. A host of factors like re-categorization of mutual funds, introduction of Total Returns Index(TRI) as benchmark have created an environment where a shift towards index funds looks inevitable.

Why index funds?

Because, they are simple and low-cost funds. These funds simply track the index and incur lower expenses than actively-managed funds. For example, UTI Nifty Index Fund has an expense ratio of 0.13 per cent, whereas actively-managed funds may charge around 1 per cent on direct plans and around 2 per cent in regular plans.

Which index funds?

Currently Nifty 50 and Nifty Next 50 are two prominent index funds with reasonable high Assets Under Management. Index funds are available with leading fund houses like UTI, ICICI, Franklin Templeton and others. Of them UTI Nifty 50 and UTI Next 50 are available with low Total Expense Ratio - 0.13% for UTI Nifty 50 Direct plan …

200 DMA or the 200 Day Moving Average, is an important indicator in technical analysis. The 200 DMA is a long term moving average that helps determine overall strength of an index or a stock. The 200 DMA is generally used as a trend following indicator, which do not predicts market direction, but rather gives an idea about the current direction. Moving average is a lagging indicator, since it is based on past prices of an index or a particular stock.

An index that is trading below its 200 DMA is considered to be in a long term downtrend and when it is above, it is in an uptrend. Whenever the index or a stock trades near these averages, they attract support in a bull market and finds resistance in a bear market. Currently, the 200 DMA of Nifty 50 is around 10800 and Nifty 50 has closed well below this level, indicating bearishness.

The two tables below show the 200 DMA of Nifty Indices and Nifty 50 stocks as of today.

Singapore Stock Exchange (SGX) will soon launch trading in Indian stock futures on its platform. The Singapore exchange currently offers trading in Nifty Index Futures, Bank Index and IT Index Futures contracts, which are very popular among overseas investors.

This could be a big blow to domestic derivative markets for reasons mentioned below:

Operational hours: The Indian derivatives markets operate in tandem with the cash markets. But, investors can trade SGX futures round-the-clock. This is an advantage for the investors, especially in the western hemisphere, who find it difficult to trade according to Indian trading hours.Cost-effective: SGX doesn’t impose securities transaction tax (STT) and stamp duty, which are levied by India.SGX is already a key destination for Indian futures among overseas investors. SGX accounts for half of the volumes in the SGX Nifty Futures.Investors can also trade from the SGX without having a broker or terminal in the exchange.
Advantage SGX!